HomeBusinessSAP Ordered To Pay R500m To SIU In Eskom Case

SAP Ordered To Pay R500m To SIU In Eskom Case

In an order issued by Tribunal Judge President Lebogang Modiba on March 20, she declared the SAP Cloud Services Agreement, concluded between Eskom and SAP on December 15, 2016, as constitutionally invalid and set it aside.

German multinational software company SAP has been ordered by the Special Tribunal to pay the Special Investigating Unit (SIU) R500m within seven days.

The SIU stated that the order was a result of a settlement agreement reached between the SIU and SAP regarding the validity of two contracts awarded to SAP by Eskom. The settlement agreement has been made an order of the tribunal.

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Invalidity of Contracts

In an order issued by Tribunal Judge President Lebogang Modiba on March 20, she declared the SAP Cloud Services Agreement, concluded between Eskom and SAP on December 15, 2016, as constitutionally invalid and set it aside.

The SIU’s investigation revealed that between 2013 and 2016, Eskom and SAP entered into two contracts, an Enabling Agreement and a Cloud Services Agreement, worth approximately R1.1bn.

Non-Compliance with Public Finance Management Act

The SIU’s findings showed that these agreements did not comply with the Public Finance Management Act, resulting in Eskom incurring fruitless and wasteful expenditures.

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Furthermore, it was discovered that after Eskom entered into a contract with SAP, the German company entered into a sales commission agreement with Cad House CC, a Gupta-linked company. Payments from Eskom to SAP were then channelled to Cad House.

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The SIU emphasized that the settlement agreement does not absolve SAP or any implicated party from possible prosecution. The order by the Special Tribunal is part of the implementation of the SIU investigation outcomes and aims to recover financial losses suffered by state institutions due to negligence or corruption.

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Florence Sibiya for SurgeZirc SA
Florence Sibiya for SurgeZirc SA
Florence Sibiya is a highly dedicated and talented reporter for SurgeZirc SA Business News. With her passion for business and her commitment to delivering accurate and reliable news, she has become an invaluable asset to the team.
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